Financial Analysis and Bankruptcy Risk Identification Model Used by Companies Operating in Poland – Empirical Study Results

Abstract

Financial analysis and bankruptcy risk assessment models are applied to assess an economic position and to identify risks to business activity. The assessment is conducted based on data from financial statements which in Poland can be prepared in accordance with both domestic and international accounting standards. Bankruptcy risk identification models which based on historical or prospective data allow identifying a probability of such an event started to appear in Poland a few years following the political changes of 1989. Currently, there are over 15 models developed by different authors and described in detail in the literature. The aim of this article is to present the results of an empirical study (survey study) on the application of financial analysis and bankruptcy risk identification models which was conducted among the largest Polish companies. The study results show that Polish companies apply tools of financial analysis to assess the economic position not only of their own entity, but also competition and business partners, and bankruptcy risk assessment models developed according to and adjusted to the Polish economic circumstances.